Role of Dynamic Capability and Information Technology in Customer Relationship Management: A Study of Indian Companies

There is a growing body of academic and practitioner literature on Customer Relationship Management (CRM), most of the research in this field being conducted in the Western context. In the emerging countries of Asia, the difference is not only about the level of technology adoption and infrastructure, but also about the way decisions are made the and technology is used to form relations, and the deeply-rooted values of employees and customers who drive the competitive performance of CRM. These contextual peculiarities of CRM have got important implications for the sources of competitive performance in the process of CRM. It has been well accepted that CRM is a strategic initiative. But, surprisingly, the CRM literature is largely silent on the issue of competitive reaction in dynamic markets of emerging Asian economies. In such markets, the domain of CRM is characterized by lots of changes. Managers cannot rely on only static firm's resources that they have assembled to take CRM decisions and drive competitive advantage. Drawing from the theoretical argument in strategic management, i.e., dynamic capability approach, this study identifies sources of competitive performance for the process of CRM in dynamic capability. It is an organization's ability to continuously improve, innovate, and reconfigure resources to match the evolving environmental needs. Information technology (IT) competence has been considered as an important moderator of the relationship between dynamic capability and competitive performance. The study articulates the drivers of dynamic capability for CRM. Further, the study investigates the main effects, as well as the interaction effects of IT and dynamic capability on competitive performance of the CRM process. A questionnaire survey has been conducted, and data collected from a sample of 334 cross-functional executives of 29 organizations from Indian banking, telecom, and retail industry. Some of the important findings of the study are as follows: In the emerging markets of Asia, dynamic capability played a crucial role in gaining competitive CRM performance across all three industries. In the highly dynamic and competitive Indian telecom industry, the dynamic capability played the most important role. Important drivers of dynamic capability also include social networking capability with the other capabilities related to integration and market orientation. Contrary to the findings of the few studies in the Western context, CRM technology had positive effects on competitive CRM performance; it also enhanced the dynamic capability- competitive CRM performance relationships. In the absence of appropriate dynamic capabilities in the CRM process, the use of CRM technology might do more harm than good.